Tax preparation software programs (hereinafter referred to as “tax programs”) are available from various vendors that assist tax preparers in preparing accurate tax returns and other tax forms for filing by or on behalf of a taxable entity with a governmental entity, e.g., a Federal, State, county, city, district, and/or other municipality (hereinafter collectively referred to as tax authorities). These tax programs guide the tax preparer through tax return processes for various tax authorities, and may automatically perform necessary tax preparations in accordance with data input and forms, schedules, tax data, tables, and formulas stored with or coded into the program. Personal and/or business tax programs may be provided. In addition, both personal and professional versions of tax programs may be offered. Professional versions may be used by tax preparation professionals to prepare various tax returns for multiple taxable entities. Further, these tax programs may be used to prepare annual taxes, quarterly taxes, etc for filing with various tax authorities by or on behalf of taxable entities.
Typically, the tax preparer will enter necessary data and information via the user interface of the tax program, and, when done, access the user interface to direct the tax program to complete the tax return under preparation. The tax program may perform any necessary calculations using the entered data and information and in accordance with tax formulas relevant to the particular tax return under preparation (e.g. Federal tax return, State tax return, local tax return, etc.), and possibly data and information from other sources such as previous tax returns or other tax-related documents, to generate appropriate calculated values for certain fields of the tax return under preparation.
The completed tax return may indicate that the taxable entity owes taxes to the tax authority or that the taxable entity is owed a tax refund from the tax authority. The tax return may then be filed (electronically or conventionally) with the tax authority. If taxes are due, the tax amount may be, but is not necessarily, paid to the tax authority by the taxable entity at the time of filing. Conventionally, the tax payment may be transferred electronically or alternatively may be paid by check. If a refund is due, the refund amount may be paid to the taxable entity by the tax authority either electronically to an account (e.g., a bank account) of the taxable entity or by check.
A taxable entity may be required to file tax returns with two or more tax authorities. For example, in some States, residents may be required to file both Federal and State income tax returns. In this case, the tax program may be used to prepare a separate tax return for each tax authority with which the taxable entity is required to file a tax return. In some cases, a taxable entity may end up owing taxes to a first tax authority while being due a refund from a second tax authority. Conventionally, the taxable entity pays the taxes to the first tax authority electronically or alternatively by a mailed payment, e.g. a check, from an account (e.g., a bank account) of the taxable entity. The taxable entity separately receives a refund from the second tax authority electronically or alternatively by a mailed payment, e.g. a check.